Secondhand cars thrive on e-commerce sites
Online sales likely to become primary choice for consumers
Fast developing e-commerce has helped boost sales of used cars in China, as the online secondhand market gains in quality and variety.
Dai Kun, founder of Uxin, a Chinese secondhand car sales site, said the online market for used cars should focus on establishing a product standardization system to give customers confidence in purchasing used cars, like shopping for other products online.
He said the company provides a package of services from tests of secondhand vehicles to sales, car loans and maintenance.
Uxin, the country’s largest used car e-commerce platform, held an IPO on the NASDAQ in late June. Its market value is close to $2.97 billion.
Xu Guoyun, former vice-president of Renrenche, another online vehicle transaction platform, said the Uxin IPO signaled that the capital market was optimistic about online sales of used cars.
“Compared with traditional brickand-mortar stores, online stores have a higher trading efficiency,” Xu said.
Uxin’s first-quarter sales hit 165,000 units, up 61.6 percent year-on-year.
Compared with the boom in online business, China’s largest secondhand car market, the Huaxiang market in southern Beijing, which has a cluster of more than 600 shops, is seeing fewer customers.
“It is obvious that the market has fewer visitors, as more and more customers opt to shop online,” said Qin Ce, who has been working in Huaxiang for five years as a salesman.
Vendors in the market are trying to catch up with digital sales by publishing their sales information on social media platforms such as WeChat, Weibo and Kuaishou to help strengthen their business.
Sun Guodong, CEO of Jiabailie Zhonglianhang (Beijing) Second-Hand Vehicle Trade, said online platforms would become the main channel for secondhand vehicles in the future, as customers opt for convenience. But after-sales services would still mainly rely on brick-and-mortar stores.
He said the company sold 800 cars last year, with online sales accounting for half of the total, and 70 percent of the cars were middle- and high-end models.
According to research by Analysys, China’s online sales of used cars stood at 2.18 million units in 2017, up 51.2 percent year-on-year. It forecast the number would increase to 6 million cars by 2020.
Jia Xinguang, executive director of the China Automobile Dealers Association, said that as China reduced tariffs on imported vehicles and auto parts and lowered the down payment, the market would see greater growth.
Wang Meng, who works in both the market and as an online car dealer, said young people in China no longer use a car until it’s worn beyond repair. Instead, they change cars because of new designs and technology.